S. Korea Ferry victims, families face hopeless compensation war

Family members of passengers missing on the overturned South Korean ferry Sewol, react at the port in Jindo April 17, 2014.

In addition to the desperate rescue attempts and the escalating blame game, the Sewol ferry victims and their family members are now expected to face a hard and complicated battle on damage compensation.

Although the passengers, both the survivors and those who died in the accident, are all covered by a number of insurances, the actual compensation process is likely to be long and painful.

Normally, life insurance clauses would exclude those who are recorded as missing as they require an official death confirmation within a year.

But when it comes to special disasters such as an aircraft crash or ship sinking, the police may acknowledge the death even when the corresponding body has not been recovered, considering the special circumstances.

The bigger issue here is that, in addition to this insurance-based compensation, victims may choose to file individual or class action suits against the shipping company for failing to put in place the necessary security measures, the shipping crew for abandoning the ship or the government for neglecting its supervisory duty.

But not only do the consequent legal processes stretch on for years, they also tend to be hard on the plaintiffs, as was in the case with the Costa Concordia, an Italian cruise ship which sank at a sea off Tuscany in January 2012, resulting in the loss of 32 lives.

The massive ship, carrying 4,252 passengers, was departing on a Mediterranean cruise when it hit the seafloor while approaching the shore. The captain, Francesco Schettino, fled the sinking ship in a lifeboat, while a number of passengers were still on board.

As compensation, the shipping company Costa offered a sum of 11,000 euros (S$19,029) per uninjured passenger and made separate individual proposals to the families of the dead and missing, according to an Associated Press report at the time.